The Free Enterprise Action Fund, a $5.6m (â¬4.3m) US mutual fund that criticised Goldman Sachs' environmental policy earlier this year, has targeted JP Morgan, proposing in a letter that shareholders force the company to re-evaluate its lobbying priorities at next week's shareholder meeting.

In a letter to shareholders made public yesterday, Tom Borelli, an adviser to the fund, proposed that JP Morgan advocate litigation reform to reduce "unmeritorious" lawsuits that he said are a drain on the company's shareholder value instead of advocating environmental reform.

JP Morgan's board of directors recommended that shareholders vote against Borelli's proposal in the notice of its 2006 annual meeting of shareholders and proxy statement.

The Free Enterprise Action Fund, which owns 85 shares of JP Morgan common stock, said JP Morgan's support of "a restrictive national policy for greenhouse gas emissions" contained in the group's environmental policy published in April 2005, is "not likely to provide significant benefits for global climate and may only cause economic harm."

In response, the JP Morgan board said: "Disclosure of our legislative and regulatory priorities and the business rationale behind every initiative and position we undertake would impose a business disadvantage on JP Morgan Chase."

JP Morgan's annual shareholder meeting is scheduled to take place on May 16 in New York.

At a Goldman Sachs shareholder meeting in April, Steven Milloy, a manager at the fund and a columnist for Fox News, objected to Goldman's gift of 680,000 acres in Chile to the Wildlife Conservation Society. Milloy questioned the environmental initiatives of chairman and chief executive Hank Paulson, describing them as harmful to shareholders.